It's clear from the spoon-fed sameness of Jane Bryant Quinn's story "Cutting the Commissions" in this week's Newsweek that she, like other mainstream journalists, had fun skewing perspectives of "traditional" real estate agents. They're an easy target -- especially when she doesn't name names.

All the usual players were mentioned -- almost as if her piece were a paid advertorial for discount brokers. And just as tellingly, "traditional" brokers, who are allegedly standing in the way of discounts to consumers, went unnamed.

"No more," Quinn reports. "If their clients find a Foxton's house they like on Realtor.com, the broker can't escape showing it. CEO Van Davis says that outside brokers are accounting for half his sales."

She clearly doesn't see the slant of her perspective. If half of Foxton's sales are accounted for by other brokers, isn't it obvious that at least a few of those brokers don't have a problem with Foxton's business model? But Quinn prefers to suggest otherwise -- that they're trying to "escape," but can't, because of the all-seeing eye of the Internet.

Who are these brokers? What are their names? Where is the proof that a broker tried to "escape" showing a Foxton's listing? We don't get to meet them. We just get to read the inference.

It just goes to show you can twist any perspective. Could you answer this question without looking guilty, "Have you stopped beating your wife?" Now ask, "How can you charge six percent?" Try answering that without looking like you're justifying extortion. Why are you worth your salary, Ms. Quinn?

Ms. Quinn doesn't write that the Internet has opened the presentation of listings to all brokers. Presuming that listings on the Internet are an advantage only for discount brokers is silly. That's why her bold statement that "the National Association of Realtors was planning to set new MLS rules to let traditional brokers keep their listings off the discounters' sites" is so erroneous. All the NAR rules were designed to do is clarify what state law already empowers all brokers to do. That is -- control where they advertise their own listings.

Once a listing reaches the Internet, it is out of the control of the broker, yet the broker sustains liability. Any selling broker could put the listing on a site that violates fair housing laws or provides illegal incentives to consumers or lenders, for example. That's why brokers want control of where their listings appear online.

If brokers want to keep their listings off other brokers' sites, that's their prerogative. It's not anti-competitive, because no broker owes another broker listings, any more than Quinn owes another magazine writer access to her sources. Sharing listings is voluntary. The real estate "cartel" as Quinn so negatively puts it, is a business-to-business cooperative, a multiple listing service where listings are put in a neutral warehouse to be retrieved by participating brokers to show to clients.

Listings were never intended to be used by one broker over another as a means to get customers. And that's just too bad for some business models. The listings are to serve brokers with customers, not to help new brokers get customers. See the difference?

Would Newsweek help US magazine get new readers by sharing its stories with the newer magazine? Of course not. Like journalists, brokers incur costs in doing business. When brokers contract with a seller, they incur the costs and liabilities for marketing the listing. Included in their contracts is the right to expose the listing as they see fit. If sellers, not other brokers, don't like the way it's done, the marketplace will speak up and changes will occur accordingly.

It is some brokers, not sellers, who are contacting magazines like Newsweek, and whipping up the gullible press to stomp on their competitors. They complain that other brokers are peventing them from competing, but their real problem is that they want the rights to advertise what doesn't belong to them - other brokers' listings. They need other brokers' listings to serve customers, but what crosses the line into using the listings for advertising is that they want to get customers. See the difference?

Quinn then goes on to list money-saving services, without mentioning that full-service can save consumers money, too. As fiduciaries, brokers try to get the highest price for their sellers. For buyers, they try to get the best deal. Doesn't that count for something?

Quinn gets away with making unsupported statements like this: "Unfortunately, some of you aren't allowed to use all these money-saving services. Your state's self-interested real-estate brokers are driving them out. Six states (Florida, Illinois, Iowa, Oklahoma, Texas and Utah) now curtail companies that offer discounts, according to Inman Real Estate News," without explaining what that curtailment actually is.

Gee, do realty brokers really have that kind to power to tell their state legislatures what to do? Are discount brokers really being unfairly "curtailed," or might these states be asking licensees to stick to state laws in their business practices? Real estate commissions oversee competitive practices, but their mandate is to protect consumers. Could it be that these states are strengthening their real estate laws in the name of consumer protection?

Quinn doesn't ask.

She also doesn't ask what her sources have to gain. Several in her story have undisclosed relationships, including two companies founded by the same person. A third source was founded by a protege of this same entrepeneur.

She also fails to observe that not all online companies want agents to make lower commissions. Some of the referral and rebate companies pay less to consumers if they negotiate lower commissions. These companies don't encourage agents to cut commissions, because it's not in their interest to do so. If the consumer pays more commission, the agent can afford higher referral fees.

Again, Quinn doesn't question. She closes with, "Hey, this is America -- we're supposed to support price competition. That means brokers, too."

Hey, this is America, Ms. Quinn. Brokers do support price competition.

The traditional brokers you namelessly accuse of maintaining a cartel include flat-fee brokers, "discount" brokers and referral-fee-only brokers, among others. They got their licenses to practice like everyone else -- by agreeing to follow state law. It's their tough luck that some have created business models designed to circumvent the more expensive, liability-ridden aspects of brokerage all of which are designed to protect the consumer.

It's not about competition at all, Ms. Quinn. Discounters have been here for generations, in case you didn't know, and many currently operate under so-called "traditional" brand names. That's because the industry is composed of independent contractors, and independents are going to do what they can to be profitable. Discount brokers, just like any other brokers, have to prove their value to the marketplace. The marketplace will decide what it wants, and real estate business models will adjust accordingly.

Published: July 13, 2005

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Blanche is a renowned author of five real estate books. Her newest, Bubbles, Booms and Busts: Make Money In Any Real Estate Market, McGraw-Hill, was rave-reviewed by The New York Times. She was also selected from hundreds of real estate experts to contribute to Donald Trump's book, Trump: The Best Real Estate Advice I Ever Received: 100 Top Experts Share Their Strategies, Rutledge Hill Press, and is featured on page 68. Order Now Review - Honors In 2006, Blanche was selected among scores of candidates to author two consumer real estate guidebooks for the National Association of Realtors: The NAR Guide to Home Buying, and The NAR Guide to Home Selling, Wiley & Sons. She is currently planning two new books for the NAR and its members.       Known for her keen insight into real estate industry issues and for her ability to make complex subjects easy to understand, Blanche is a sought-after keynote and continuing education speaker. Real estate organizations from MLSs, to brokerages, to franchisors, to associations hire her to provide up-to-the-minute analysis of real estate industry news and advice on how to improve revenues. Her passionate delivery, peppered with stinging wit, is a huge hit with audiences and fans. Don Klein, CEO Greater Nashville Association of Realtors, Blanche Evans, Richard Courtney, president 2007, GRAR "The GNAR membership meeting last week featured Blanche Evans as the keynote speaker. Her comments and insights resonated extremely well with those in attendance and we have had many requests for copies of her PowerPoint Presentation. She was a terrific part of the membership meeting and convention program!" - Don Klein, CEO Greater Nashville Association of Realtors Coverage from WSMV, Nashville - 8-14-2007 That Interview Guy - Get Inside The Head Of Today's Generation 2007 AE Institute Session - To purchase 2006 AE Institute Session - Parts 1 2 3 4 5 6 7 8 9 HouseValues Mastermind call - Parts 1 2 Blanche's fireside chat with Jeremy Conaway, HAR - Click here. For more articles by Blanche, click here.